Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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482. To ask the Minister for Housing, Planning, and Local Government if he will provide an update on the participation of the pillar banks in the first home shared equity loan scheme including the amount of money the banks will invest in the scheme; the role their staff will have in administering the scheme; when the scheme will be open to applicants; and when he expects the Central Bank to give its view on the participation of the banks in the scheme. [51204/21]

Darragh O'Brien (Dublin Fingal, Fianna Fail)
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The Affordable Housing Act 2021, cleared all stages in the Oireachtas on 12 July and was signed in to law by the President on 21 July. The provisions of the Act establish the basis for four affordable housing measures. These measures will deliver on the Programme for Government commitment to put affordability at the heart of the housing system, and prioritise the increased supply of affordable homes, through (1) delivering affordable homes on local authority lands, (2) the introduction of a new form of tenure in Cost Rental, (3) a new affordable purchase shared equity ‘First Home’ scheme, and (4) expanding Part V planning requirements to increase the 10% contribution requirement to 20% and to apply it to cost rental as well as social and affordable housing.

Part 4 of the Act provides the basis for the establishment of the First Home scheme.  Where an eligible household cannot afford the purchase price of an eligible home, it will be supported by virtue of the scheme purchasing of an equity stake in the home. It is anticipated the scheme will be operated by a newly established special purpose vehicle (SPV). In this regard, I can confirm that the banking sector has confirmed it is committed to working with the State to develop and deliver this support to households who are not in a position to afford what will be modest family homes.  The sector has agreed in principle to match State equity funding in order to increase the pool of funding available to potential new homeowners under the scheme.

My Department is engaging with a range of stakeholders including representatives from the Banking Payments Federation of Ireland, Bank of Ireland, Allied Irish Bank and PTSB to consider the administrative and operational provisions of the scheme.   Work on the detailed design and operation of the scheme is advancing. The full scheme details will be confirmed on completion of this work.

The preparations for the Scheme has included ongoing engagement with the Central Bank in relation to the interaction between the mortgage measures – the macro prudential rules - and the First Home shared equity scheme. Informed by this, the Scheme is being designed as an equity product rather than being a debt on the purchaser. The First Home scheme will not provide loans or mortgages to households.  The Central Bank has confirmed that it will consider the interaction of the scheme with the mortgage measures as part of the regular annual review later this year, well in advance of the planned launch of the scheme.